Reliance Power exits Tilaiya project

Reliance Power has exited from the 4,000 MW Tilaiya UMPP in Jharkhand. The company has reached an out-of-court settlement with distribution utilities of 10 states, a little over six months after serving a notice for termination of the power purchase agreement for the project. Under the settlement, Reliance Power will get Rs 114 crore in compensation and bank guarantees of Rs 800 crore will also be released. The termination will help Reliance Power to reduce its capital expenditure pipeline by Rs 36,000 crore – debt of Rs 27,000 crore and equity commitment of Rs 9,000 crore. The company had bagged the right to develop the Tilaiya UMPP in 2009 through competitive bidding, with a winning tariff of Rs 1.77 a unit.